Slide 1: FY2023 Financial Report
FY2023 Financial Report ・ FY2023 Financial Results / FY2024 Financial Outlook ・ Kureha Mid-/Long-Term Management Plan(FY2023-2030) - The Rolling Plan 2025 May 13, 2024
Slide 2: Contents
1 Contents Outline (2) ～ (3) Ⅳ. Kureha Mid-/Long-Term Management Plan(FY2023- 2030)- The Rolling Plan 2025 ・Performance Targets and KPI (29) Ⅰ.FY2023 Financial Results ・Operating profit Growth Scenario (30) ・FY2023 Financial Summary (5) ～ (8) ・FY2025 Performance Targets by Segment (31) ・Segment Perf
Slide 3: Outline
2 Outline FY2023 Results and FY2024 Outlook VS FY2022 ・Sales and profits of PVDF for LiB declined due to a drop in both volume and unit price as Revenue and Profit （\ billion） the EV market and customers' inventories continued to adjust, reversing a sharp increase in demand until the 1H of FY2022, w
Slide 4: Outline (2)
3 Outline (2) Rolling plan of Mid- to Long-term Management Plan ・The growth of the EV market is slowing down, and the environment for the PVDF business has changed drastically from what was expected at the start of the medium- to long-term management plan. ・Although the EV market is growing at a slo
Slide 5: I. FY2023 Financial Results
4 I. FY2023 Financial Results (April 1, 2023 – March 31, 2024)
Slide 6: FY2023 Financial Summary (1)
5 FY2023 Financial Summary (1) （\ billion） ＜VS FY2022＞ FY2023 FY2022 〔Revenue〕 % Sales of PPS, PGA, specialty chemicals, and construction Revenue 178.0 191.3 -7.0% business increased, but PVDF binder sales for LiB declined Core operating profit 18.6 24.3 -23.3% sharply, resulting in a combined decli
Slide 7: FY2023 Financial Summary (2)
6 FY2023 Financial Summary (2) Revenue & Core Operating Profit by Segment （\ billion） FY2023 FY2022 Results Results 1H 2H Full-year 1H 2H Full-year Revenue 88.5 89.5 178.0 101.8 89.5 191.3 Advanced Materials 34.0 30.5 64.5 47.3 35.4 82.7 Specialty Chemicals 17.1 16.9 33.9 17.5 14.3 31.8 Specialty Pl
Slide 8: FY2023 Financial Summary (3)
7 FY2023 Financial Summary (3) （¥ billion） Segment Revenue & Core Operating Profit (vs. FY2022) FY2022 FY2022 【Revenue】 【Core Operating Profit】 FY2023 FY2023 82.7 64.5 10.1 46.8 47.3 8.6 8.2 31.833.9 18.7 18.2 4.8 11.3 13.9 1.8 1.7 2.8 2.5 0.9 1.5 Advanced Specialty Specialty Constructions Other Adv
Slide 9: FY2023 Financial Summary (4)
8 FY2023 Financial Summary (4) ＜Other income/expenses, financial income/expenses＞ （¥ billion） *1 2023/3 Other Expenses FY2023 FY2022 Packaging materials impairment of ML film business: Core operating profit 18.6 24.3 ¥2.1bn Adjustment -0.5 -0.2 *2 2024/3 Other Incomes Other income *2 1.9 1.2 Reversa
Slide 10: Segment Performance: Advanced Materials
9 Segment Performance: Advanced Materials （\ billion） FY2023 FY2022 ＜VS FY2022＞ % Revenue ➘ Operating profit ➘ Advanced plastics 45.0 63.0 -29% Advanced Plastics Despite the increase in sales revenue of PPS and PGA Carbon products 7.9 6.9 13% products for shale oil and gas drilling applications, rev
Slide 11: Segment Performance: Specialty Chemicals
10 Segment Performance: Specialty Chemicals （\ billion） FY2023 FY2022 ＜VS FY2022＞ % Revenue ➚ Operating profit ➘ Agrochemicals 9.7 9.3 4% Agrochemicals, Pharmaceuticals Pharmaceuticals 4.0 3.8 5% Sales of agrochemicals, horticultural fungicides, and pharmaceuticals increased, but income Industrial c
Slide 12: Segment Performance: Specialty Plastics
11 Segment Performance: Specialty Plastics （\ billion） FY2023 FY2022 ＜VS FY2022＞ % Revenue ➚ Operating profit ➘ Home products 23.2 22.5 3% Home products, fishing lines Increase in sales revenue and profit mainly due to the Fishing lines 5.1 4.7 7% impact of the price revision of household wraps from
Slide 13: Segment Performance: Construction and Other Operation
12 Segment Performance: Construction and Other Operation （\ billion） FY2023 FY2022 ＜VS FY2022＞ % Construction 【Construction】 Revenue ➚ Operating profit ➚ Revenue 13.9 11.3 23% Increase due to increase in private-sector construction Operating profit 1.5 0.9 68% work. Other Operation 【Other Operation】
Slide 14: Financial Position
13 Financial Position Assets Liabilities and Equity （\ billion） Mar.31 Mar.31 Mar.31 Mar.31 Change Change 2024 2023 2024 2023 Cash and cash equivalents 23.1 32.2 -9.1 Trades and other payables 20.5 27.7 -7.2 Trades and other receivables 40.6 31.9 8.8 Interest-bearing debt 54.9 26.3 28.6 Inventories
Slide 15: Cash Flow
14 Cash Flow （\ billion） FY2023 FY2022 Change Profit before income tax 13.9 23.0 -9.1 Depreciation 11.7 11.6 0.0 Other -14.0 -11.9 -2.1 Cash flow from operating activities 11.6 22.7 -11.1 Cash flow from investing activities -34.3 -11.1 -23.2 Free cash flow -22.7 11.6 -34.3 Cash flow from financing a
Slide 16: II. FY2024 Financial Outlook
15 II. FY2024 Financial Outlook (April 1, 2024 – March 31, 2025)
Slide 17: FY2024 Financial Forecast (1)
16 FY2024 Financial Forecast (1) （\ billion） ＜VS FY2023＞ FY2024e FY2023 1H 2H FY % 〔Revenue〕 Revenue of PVDF for automotive LiB binder and PGA will Revenue 85.0 85.0 170.0 178.0 -4.5% increase, but revenue of agrochemical customers will Core operating profit 7.0 7.0 14.0 18.6 -24.9% decrease due to
Slide 18: FY2024 Financial Forecast (2)
17 FY2024 Financial Forecast (2) Revenue and Operating Profit by Segment （\ billion） FY2024e FY2023 1H 2H FY 1H 2H FY Revenue 85.0 85.0 170.0 88.5 89.5 178.0 Advanced Materials 34.0 36.0 70.0 34.0 30.5 64.5 Specialty Chemicals 15.5 13.5 29.0 17.1 16.9 33.9 Specialty Plastics 21.0 19.0 40.0 23.4 23.9
Slide 19: FY2024 Financial Forecast (3)
18 FY2024 Financial Forecast (3) ＜Segment Revenue & Core Operating Profit (vs. FY2023)＞ （¥ billion） 【Revenue】 【Core operating profit】 FY2023 FY2023 FY2024e FY2024e 8.2 64.570.0 47.3 4.8 5.7 5.2 40.0 33.929.0 18.216.5 2.5 13.914.5 1.7 1.5 1.3 1.0 0.8 Advanced Specialty Specialty Constructions Other A
Slide 20: Segment Performance Forecast: Advanced Materials
19 Segment Performance Forecast: Advanced Materials （\ billion） ＜VS FY2023＞ FY2024e FY2023 Change Revenue ➚ Operating profit ➚ % Advanced plastics Advanced plastics 50.0 45.0 11% Revenue of PVDF for automotive LiB binder will increase due to gradual growth in the EV market, Profit margins in the PVD
Slide 21: Segment Performance Forecast: Specialty Chemicals
20 Segment Performance Forecast: Specialty Chemicals （\ billion） FY2024e FY2023 Change ＜VS FY2023＞ % Agrochemicals 6.5 9.7 -33% Revenue ➘ Operating profit ➘ Agrochemicals Pharmaceuticals 3.5 4.0 -13% Revenue and profits of fungdomestic market. Industrial chemicals 10.5 10.7 -2% Industrial chemicals
Slide 22: Segment Performance Forecast: Specialty Plastics
21 Segment Performance Forecast: Specialty Plastics （\ billion） FY2024e FY2023 Change ＜VS FY2023＞ % Revenue ➘ Operating profit ➘ Home products 23.5 23.2 1% Home products, fishing lines Fishing lines 5.5 5.1 8% Home products profit increase due to sales growth, but profit decrease due to higher fixed
Slide 23: Segment Performance Forecast: Construction and Other Operation
22 Segment Performance Forecast: Construction and Other Operation （\ billion） FY2024e FY2023 Change ＜VS FY2023＞ % Construction 【Construction】 Revenue ➚ Operating profit ➘ Revenue 14.5 13.9 4% Revenue increases, but profit decreases due to a Operating profit 0.8 1.5 -46% decrease in high-margin proje
Slide 24: Cash Flow Forecast
23 Cash Flow Forecast （\ billion） FY2024e FY2023 Change Profit before income tax 14.0 13.9 0.1 Depreciation 13.4 11.7 1.7 Other 0.4 -14.0 14.3 Main factors Cash flow from operating activities 27.8 11.6 16.2 CF from operating activities +16.2 Cash flow from investing activities -51.8 -34.3 -17.5 Impr
Slide 25: III. Key Indicators
24 KUREHA CORPORATION Il, Key Indicators KUREHA 7
Slide 26: Key Indicators (1)
25 Key Indicators (1) (in billions of yen) Capital investment 522 Depreciation expenses 500 150 134 121 117 116 116 117 400 353 103 102 103 99 300 100 61 59 59 59 60 165 244 54 51 50 54 200 114 103 132 149 143 143 98 50 67 100 60 55 58 74 82 82 76 50 51 49 50 60 58 57 57 57 0 54 48 40 58 67 61 67 98
Slide 27: Key Indicators (2)
26 Key Indicators (2) ROE ROIC 10% 9.0% 8.4% 8% 7.0% 7.7% 7.4% 8.1% 6.3% 6.5% 6.1% 6.6% 8% 7.1% 5.8% 6% 4.9% 6% 4.5% 4.6% 3.9% 4.1% 3.5% 3.6% 4% 2.9% 4% 2% 2% 0% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 estimate estimate ROA PBR 1.5 10% 7
Slide 28: Key Indicators (3)
27 Key Indicators (3) 1 Net D/E Ratio Equity Ratio 0.63 100% 0.52 0.5 0.36 72% 70% 73% 0.28 67% 67% 0.21 0.18 75% 0.14 62% 65% 0.06 58% -0.01 -0.03 53% 49% 0 50% -0.5 25% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 estimate estimate EPS 288 （Ye
Slide 29: IV. Kureha Mid-/Long-Term Management Plan (FY2023-2030) - The Rolling Plan 2025
28 IV. Kureha Mid-/Long-Term Management Plan (FY2023-2030) - The Rolling Plan 2025 Note: The performance targets and key performance indicators for FY2030 will be released at the time of the announcement of the next medium-term management plan starting from FY2026..
Slide 30: Performance Targets and Key Performance Indicators (KPI)
29 Performance Targets and Key Performance Indicators (KPI) To promote balance sheet-focused management with greater emphasis on capital returns, Kureha sets a new ROE target for FY2025 Improves ‘numerators’ of ROE by executing extensive business expansion measures and corporate-wide cost reduct
Slide 31: Operating Profit Growth Scenario
30 Operating Profit Growth Scenario Will strengthen and expand the profit base by executing thorough measures to revamp the PVDF business and expand other existing businesses Will implement across-the-board measures to further reduce costs in order to ensure profit improvement in case PVDF- rela
Slide 32: FY2025 Performance Targets by Segment
31 FY2025 Performance Targets by Segment Revenue & Core Operating Profit by Segment （\ billion） FY2023 FY2024 FY2025 FY2025 Results Plan Estimate Original Plan Revenue 178.0 170.0 185.0 or more 200.0 Advanced Materials 64.5 70.0 81.0 100.0 Specialty Chemicals 33.9 29.0 30.0 30.0 Specialty Plastics 4
Slide 33: Capital Strategies
32 Capital Strategies A new minimal yearly dividend is set at ¥86.7 per share Share repurchases to double from ¥20 billion to ¥40 billion for the three-year period from FY2023 to FY2025 The Board of Directors to determine each year on the cancellation of treasury shares which are considered as
Slide 34: Shareholder Returns
33 Shareholder Returns Kureha’s basic policy on the distribution of earnings is to maintain stable dividends with a target dividend payout ratio of 30% or more, while enhancing internal reserves to enable active investment in future business expansion. Moreover, a minimal annual dividend is set at ¥
Slide 35: V. Business Strategies
34 KUREHA CORPORATION V. Business Strategies KUREHA 7
Slide 36: PVDF Business - Changing Business Environment (1)
35 PVDF Business - Changing Business Environment (1) Global EV sales volumes and growth rates Sales volumes of New Energy Vehicles (NEV) in Europe– a primary market for Kureha PVDF (1,000,000 vehicles) (1000 vehicles) 18 140% 1,000 EV販売台数 EV sales volume 対前年比 YoY change% 16 900 120% 117% 14 800 100%
Slide 37: PVDF Business - Changing Business Environment (2)
36 PVDF Business - Changing Business Environment (2) Kureha 14,000 PVDF sales volume trends Inventory adjustment: FY2022-2030 CAGR assumed 12,000 The global EV market initially under Kureha mid-/long- continues to expand gradually, term management plan but in Europe, our customers’ 10,000 primary sa
Slide 38: PVDF Business – Performance Trends
37 PVDF Business – Performance Trends Business performance trends • An upward trend of the EV market is unchanged both in the US and Europe, although the market growth has slowed. Higher pricing driven by extraordinary Revenue (¥billion) demand and a surge in raw material • Customers’ excess stock,
Slide 39: PVDF Business – Our Investment Plans Onward
38 PVDF Business – Our Investment Plans Onward PVDF facility expansion projects proposed under the mid-/long-term management plan Capacities (in metric tons) Existing facilities Expansion projects 1) Iwaki Factory 6,500 +8,000 • Our Iwaki Factory capacity expansion project is proceeding as scheduled
Slide 40: PVDF Business – Risk Awareness & Response Measures
39 PVDF Business – Risk Awareness & Response Measures Risk related to: Recognition & Response measures PFAS restrictions • In the EU, the proposed restrictions for PFAS substances are scheduled to be verified in as early as 2025 and enacted partly for substances with no grace period in 2027. However
Slide 41: PGA Business – Market Environment
40 PGA Business – Market Environment US Oil and Gas Wells Completed by Region Crude Oil Prices 16000 Area of underground Unit: US$ / bbl temperatures 140 14000 high 12000 high 120 2020-2023 mid-to-high CAGR 17％ 10000 100 mid-to-high 8000 low 80 6000 60 4000 low 40 2000 低温 low 20 0 2019 2020 2021 202
Slide 42: PGA Business - Frac Plug Market
41 PGA Business - Frac Plug Market 25％ Area of high underground 15% temperatures Bakken Area of mid-to-high 20％ underground temperatures 10% 6％ Area of low underground Niobrara Planning for entry temperatures 23％ Planning for entry Appalachia Anadarko 17％ 16％ Planning for entry 40% Haynesville Size
Slide 43: PGA Business – Business Progress
42 PGA Business – Business Progress Break-even analysis Business revenue Marginal profit adjusted by （単位:億円） ¥ billion excluding impacts of irregular 120 12 固定費 Fixed cost 限界利益 Marginal profit accounting treatment and whether or not production 100 10 activities are carried out 118％ 80 8 Adjusted mar
Slide 44: Home Products Business – Business Strategies
43 Home Products Business – Business Strategies Domestic Food wrap film market A shift in our business strategy ¥ billion Million m2 • Although Japan’s population is decreasing, there is an increasing need to streamline housework in more 800 80 3,500 dual-income households, suggesting potential 700
Slide 45: Agrochemicals Business
44 Agrochemicals Business Agrochemicals business revenue Business environment • Kureha’s agrochemical shipment in FY2022 was far （単位:億円 ¥ billion more than the actual demand due to a surge in grain 120 12 1 prices and global supply chain risks. • In FY2023, inventory adjustments began in the end- 10
Slide 46: Progress in New Business Development (1)
45 Progress in New Business Development (1) We are exploring development themes in the areas of Environment & Energy, Life, and Digital Communications with a market-in perspective and a future global expansion in mind, while actively incorporating third-party technologies in our development. <Digita
Slide 47: Progress in New Business Development (2)
46 Progress in New Business Development (2) <Environment> • Our corroborative initiative with US startup, Claros Technologies, Inc., to provide technology solutions and services that capture and destroy PFAS substances in waste water, including low-molecular-weight perfluorooctanesulfonic acid (PFOS
Slide 48: Improving the Business Portfolio and ROIC
47 Improving the Business Portfolio and ROIC FY2023 Kureha further optimized its business portfolio by: • Proceeding to withdraw from the heat shrink multilayer film business, a part of Kureha’s food packaging business • Reconstructing two businesses in the Kureha Group (effective as of April 1, 2
Slide 49: Review of Capital Investment Plans
48 Review of Capital Investment Plans Kureha’s policy to actively invest for growth is unchanged. Our investment plan for the PVDF business is however revised in light of significant changes in the business environment. The decrease in capital expenditures related to PVDF is redeployed for expan
Slide 50: VI. Progress toward Environmental Load Reduction Targets
49 VI. Progress toward Environmental Load Reduction Targets
Slide 51: Reducing Our Environmental Footprints
50 Reducing Our Environmental Footprints CO2 emission reduction Zero waste emission ratio （FY2030 target) （FY2025 target） 30％ or more 1.5％ vs. FY2013 actual • Reduce the amount of waste sent to landfill by ・Working to establish the technology that enables recycling plastic wastes generated from our
Slide 52: Disclaimer
51 Disclaimer • This presentation material is provided for a deeper understanding of our company, and is not intended to be used as a solicitation for investment or other activities. • This material has been prepared by our company based on the information available at the time of the presentation.